6 replies to this topic

[caretaker51]

My aunt died in 2011. She lived with me the last 17 years of her life. I filed her 2010 income taxes. The IRS made adjustments to her 2010 adjusted income and is seeking additional tax payment. She had no "estate"; only a bank account held jointly with me and a small annuity of which I am the beneficiary. She didn't have a will. There is some money in the bank account we held jointly, but not enough to pay the additional taxes + interest. Am I legally required to pay the additional taxes? I do not disagree with the corrections made by the IRS, but do not want to pay the additional amount if it isn't legally required.

[Tax_Counsel]

I filed her 2010 income taxes.

Did you sign the return? If so, in what capacity—personal representative of the estate, fiduciary, or what? Was there a refund on the return? If so, what happend to the refund?

She had no "estate"; only a bank account held jointly with me and a small annuity of which I am the beneficiary.

In what state did you and your aunt reside and how was this account held: tenants in common or joint tenants with a right of survivorship? If the former, was there any pay on death beneficiary designation naming you beneficiary?

How did you become the beneficiary of the annuity? Since she didn't have a will, did it pass to you by intestacy or something else?

Am I legally required to pay the additional taxes? I do not disagree with the corrections made by the IRS, but do not want to pay the additional amount if it isn't legally required.

You are not liable to be just because she was your aunt and lived with you prior to her death. But even though she had no formal estate, the IRS may nevertheless claim the assets that would have been part of her estate to pay the tax liability. In addition, if you signed the return as fiduciary/personal representative of your aunt, you might have some personal liability as a result of that, though again usually limited to the value of the assets that your aunt had that would have been available to pay the claim.

[caretaker51]

We live in Illinois. She named me as the beneficiary when the annuity was established. I had her power of attorney for healthcare and property, and signed the tax return as such. The bank account was established as joint tenant with right of survivorship.

I want to do the right thing, and honestly do not want any future problem with the IRS.

[pg1067]

You said you filed her 2010 return but that she died in 2011. Did you file a return for the tax year 2011? If not, why not?

[caretaker51]

I did file her 2011 taxes.

[FindLaw_AHK]

I suggest you consult with a local Illinois Tax Lawyer for clarification on your specific matter regarding you filing such tax returns. Many lawyers do offer a free consultation.

[mscash]

If you paid for her funeral and other final expense that has priority over other liens and you would not be liable. If there was a bunch of money in the account that was hers and not yours it may be different.